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Small Firms | Economics for GCSE/IGCSE - Year 11 PDF Download

Reasons Why Small Firms Exist

  • In 2015, nearly 99% of businesses in the European Union were categorized as small enterprises, employing fewer than 49 individuals.
  • Certain enterprises commence operations on a small scale but later expand into sizable corporations or even multinational entities. For example, Amazon's origins trace back to a garage.
  • Despite the potential for growth, some firms either stagnate or deliberately opt to maintain their small size.

Reasons Why Small Firms Exist 

Small Firms | Economics for GCSE/IGCSE - Year 11

Advantages & Disadvantages of Small Firms

Small Firms Experience Both Advantages & Disadvantages When Compared With Large Firms

Small Firms | Economics for GCSE/IGCSE - Year 11

The document Small Firms | Economics for GCSE/IGCSE - Year 11 is a part of the Year 11 Course Economics for GCSE/IGCSE.
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FAQs on Small Firms - Economics for GCSE/IGCSE - Year 11

1. Why do small firms exist?
Ans. Small firms exist because they are able to adapt quickly to changes in the market, have lower overhead costs, can provide personalized services, and often specialize in niche markets.
2. What are some reasons for the emergence of small firms?
Ans. Small firms often emerge due to entrepreneurs seeking independence and autonomy, the desire to fulfill unmet market needs, the availability of technology and resources to start a business, and the potential for high profits in certain sectors.
3. How do small firms benefit from lower overhead costs?
Ans. Small firms benefit from lower overhead costs by having smaller office spaces, fewer employees, and less bureaucratic processes, allowing them to operate more efficiently and competitively in the market.
4. What advantages do small firms have in providing personalized services?
Ans. Small firms have the advantage of providing personalized services by being able to build closer relationships with customers, understand their specific needs better, and tailor their products or services accordingly.
5. Why do small firms often specialize in niche markets?
Ans. Small firms often specialize in niche markets because they can focus on serving a specific segment of the market, differentiate themselves from larger competitors, and capitalize on unique opportunities for growth and profitability.
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